In this industry where high carbon producing activities like air travel and long-distance trucking are necessary to conduct business, it might be worthwhile to consider whether or not the utilization of carbon offsets could be a tool to help your company reduce its carbon footprint. This topic has been receiving a lot of media coverage recently, and I have found that it is a fairly complex one.
A brief history lesson may be helpful. Beginning with the 1997 U.N. Kyoto Protocol, a system of cap and trade developed which limits the amount of greenhouse gasses (GHGs) that participating countries or companies can emit and permits those entities to either sell or purchase credits to balance their CO2 limits. A carbon credit is a tradable certificate which allows its holder to emit one ton of carbon dioxide.
Just a heads up, while the U.S. did sign the UN treaty, it has never ratified it, so we are not bound by it here. Individuals and companies may still purchase carbon credits and offsets; however, as voluntary, private investments. These private investments account for most of the activity in carbon trading markets.
The countries of the European Union are among those who have adopted these measures with varying degrees of success. Many who support carbon trading state that it is preferable to a carbon tax because it minimizes government control and bureaucracy while encouraging industries to self-regulate.
Here is an example of how carbon offsets work. Say a company installs energy-saving equipment, thereby reducing its carbon emissions by one ton.
It could sell that credit to a factory that is exceeding its regulated cap of CO2 emissions, bringing the factory back into compliance. Such carbon offsets are measured in the form of metric tons of carbon dioxide-equivalent (CO2-e) and include six primary categories of GHGs.
However, opponents to the system say that it has many flaws. First and foremost is the idea that buying carbon offsets appeals the most to western countries, where energy consumption is highest.
Many reduction projects, like wind farms, biomass energy plants, and forestry projects originate in developing nations. This arrangement allows developed nations to continue with business as usual rather than modifying their own behaviors to reduce carbon outputs.
Some of the accepted offset projects, like those mentioned above, are also controversial. For instance, forest planting is intrinsically problematic due to the fact that markets are forward-selling an asset that takes time to grow.
These assets are vulnerable to things like fire, disease, and harvesting. In some cases, fast-growing varieties are planted which damage the indigenous eco-system.
Another potential problem is that there is no single standard for regulation of carbon credits. As a result, the process is open to unverified values and outright fraud.
Here’s an ironic outcome, in some instances, carbon reduction projects lead to higher emissions. This is because the reducing entity may receive such a huge capital influx from the sale of its credits that it ends up expanding its own operations, thus increasing its carbon emissions.
You thought this was going to be simple, didn’t you?
As a result of these and many other factors, I believe that carbon trading is a good idea that has not quite matured. However, anything we can do to get governments and industries to take responsibility for their own environmental impact is a step in the right direction.
While the system may be experiencing growing pains at present, I still support its stated purpose and am confident that some good is being accomplished through these efforts.
Since carbon is predicted soon to become the world’s largest traded commodity, there is no doubt that the system will be refined.
So are carbon offsets a good way for the industry to responsibly reduce its carbon footprint? Clearly, there is no simple answer, but I think as with any capital investment, research is necessary to identify those offerings that are legitimate.
Since credits can be purchased for as little as a few dollars, I believe there is a good argument for taking responsibility for our own carbon output and supporting a system which has potential to minimize our industry’s negative impact on the planet.
Exhibit City News recently reported on ASAE’s purchase of the Convene Green Alliance. My kudos to ASAE for recognizing the importance of its role in facilitating greener industry practices!
I have long been a fan of CGA’s activities and believe that ASAE will provide the influence necessary to set new industry standards. Perhaps carbon offsetting will make the agenda for 2011?
Green tip for February
If you or your company would like to purchase carbon offsets for air travel, online vendors like Expedia and Travelocity allow you to add carbon credits to your travel purchases for a minimal cost.
In addition, consider renting a hybrid or EV car when you arrive at your destination. Avis, Budget, and Enterprise are all expanding their alternative vehicle selections.
Haley Wilson is a green business development consultant in Las Vegas, Nevada. She assists companies with the implementation of greener practices, marketing strategies and brand identities. She can be reached at
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